By Andrew Steele - 8 Feb 2013
"Word on the street" is that Hobson Gardens' multi-million
dollar "leaky home" claim against, amongst others, Mainzeal, the
original builder of the complex, was settled on the basis that
Mainzeal agreed to supply labour and materials for the repair of
the building. If this is true, then Mainzeal's promise will
represent a multi-million dollar settlement. Mainzeal's
unexpected receivership must place its performance of any
settlement promises in jeopardy.
Martelli McKegg was not involved in the Hobson Gardens claim,
but it regularly acts for body corporates and unit owners in unit
title development "leaky home" claims.
In situations where settlement contemplates provision of labour
by a defendant contractor, one obvious and critical protection for
claimants is that the defendant's promised performance be secured
by a "performance bond". This can take the form of a
bank guarantee which provides money security for the defendant's
performance or a dependable guarantee by some other substantial
third party. If a valuable bond is obtained, then it may not
matter if the defendant fails to perform as promised, because the
units owners may call upon the bond to have the work done by an
alternative contractor.
However the settlement agreement was worded, we sincerely hope
the owners of Hobson Gardens have been adequately protected so they
avoid being left high-n-dry by Mainzeal's misfortune.
Contact
Leaky
building team